The Indian film industry, the largest in the world, is all set to join hands with the British tinsel town.

During British Prime Minister Tony Blair's two-day visit to India from Wednesday, the two countries will sign a landmark co-production agreement for films, making it easier for production houses on both sides to work with each other, a spokesman for the British culture department said.

The agreement will follow a deal struck by British Culture Secretary Tessa Jowell and Indian Information and Broadcasting Minister S. Jaipal Reddy in March in a move aimed at pooling resources to make films.

The co-production treaty would encourage Indian filmmakers to invest in British talent and locations. In return they would benefit from British filmmaking expertise and the films could be eligible for tax relief of 100 percent of production costs, an incentive designed to encourage investment in the British domestic industry.

The move follows the growing and visible impact of popular Bollywood films in Britain - a far cry from the days when British audiences would only watch films made by directors of international repute such as Satyajit Ray and Mrinal Sen.

These days quality Bollywood films such as "Lagaan" and "The Rising" have begun to attract mainstream viewers in Britain.

In addition, a growing crop of home-grown Asian film makers such as Gurinder Chadha have come up with a string of mainstream hits, including "Bend It Like Beckham" and "Bhaji On The Beach".

And one-time Mumbai film director Shekhar Kapur has literally crossed over to make London his home.

The planned agreement was given a cautious welcome by Nasreen Munni Kabir, the Indian-born filmmaker biographer of Guru Dutt and head of the production unit, Hyphen Films.

"It is excellent news that there are co-production plans but the most important thing will be whether British mainstream distributors will also start acquiring these films for wider distribution," she said.

"Otherwise these efforts will go to waste."

Bollywood is the largest film industry in the world. Since 1931, when talkies were first introduced in India, the film industry has produced more than 67,000 films in more than 30 different languages and dialects. In 2001, the industry produced 1,013 films making it the world's largest feature film producer.

But Kabir, who has promoted good Indian cinema for decades across Europe, emphasised the need for quality.

"Ultimately, if a film is good it will please the audience. One cannot plan for success, whether in the UK or in India. But unless these films have financial support, no one will ever get to know about them," Kabir told.

"Bollywood in the UK in the mainstream is famous by reputation of the Indian film industry - not by film titles, unlike say the Chinese cinema through films like 'Crouching Tiger, Hidden Dragon' and 'Hero'."

Tessa Jowell, speaking after her March meeting with Reddy, said: "Bollywood is the most impressive and spectacular film industry in the world. Like the UK film industry, it has a rich heritage of producing entertaining, challenging and culturally relevant cinema.

"It makes sense for our industries to join forces so that we can raise our game even further."

The British hope is that the treaty will enable the two countries to become more competitive on the world entertainment stage, drawing on the wealth of talent that both countries possess.

An added financial incentive behind Britain entering into co-production treaties, according to experts, is that Hollywood productions shooting in treaty countries could qualify as British - acting as a sweetener for big-budget projects to base themselves in Britain.

British producers were involved in 476 million pounds worth of co-production in 2004, up from 206 million pounds in 2001. Treaties already exist with Australia, Canada, France, Germany, Italy, New Zealand and Norway and more are planned with China, South Africa and Morocco.